FinMin releases revised guidelines for public funded projects

Finance Ministry has come out with revised guidelines for public funded projects under which schemes should be designed keeping in view economies of scale and the need to share implementation machinery.

The streamlining of the public funded projects is aimed at expediting implementation and reducing time and cost overruns, an official said.

The government in the Budget 2016-17 had announced to do away with plan, non-plan distinction at the end of the twelfth five-year plan.

After that announcement it was imperative that a plan, non-plan neutral appraisal and approval system is put into place, the official said.

The quality of scheme or project formulation is the key bottleneck which leads to poor execution at the implementation stage including time and cost overruns.

“While designing new schemes/sub-schemes, the core principles to be kept in mind are economies of scale, separability of outcomes and sharing of implementation machinery.

“Schemes which share outcomes and implementation machinery should not be posed as independent schemes, but within a unified umbrella programme with carefully designed convergence frameworks,” the official added.

Further as per the revised guidelines, no new autonomous body, institution or other special purpose vehicle should be set up without the approval of the cabinet.